Review and dynamics
Since today’s opening session the USD has dropped against the Yen and the Euro because of the profit taking orders caused by the recent rise in the USD. Yesterday the pair EUR/USD has rebounded from support level of 1.0710 (lows of December 2015) and is now rising to the nearest resistance level of 1.0795 (ЕМА50 the hourly chart).
However, the pair EUR/USD remains in the downward channel on the weekly chart with the lower limit near the level of 1.0600.
On the daily, weekly and monthly charts the indicators OsMA and Stochastic give sell signals, confirming strong downward momentum. However, on the hourly and 4-hour charts the indicators give signals for long positions, showing that upward correctional is likely to continue.
If the rise continues the targets will be at the resistance levels of 1.0855 (the lows of last month) and 1.0900 (ЕМА144, ЕМА200 on the hourly chart, the lows on the day of Brexit referendum).
However, long positions on EUR/USD will be advisable only after consolidation of the price above the level of 1.1000 (ЕМА144, ЕМА200 on 4-hour chart).
Short positions are preferable now and the rise in the pair is likely just an upward correction.
Breakout of the level of 1.1000 may trigger upward correction to the line of balance at the level of 1.1135.
Breakout of the level of 1.1135 (ЕМА200 on the daily chart, ЕМА50 on the weekly chart) may trigger further rise in the pair EUR/USD up to the level of 1.1285 (Fibonacci 23.6% after the decline from the highs of 2014).
However, the pair EUR/USD remains under pressure in a descending channel on the weekly chart with the limit near the level of 1.0600.
Support levels: 1.0710 and 1.0600.
Resistance levels: 1.0855, 1.0900, 1.1000, 1.1050 and 1.1135.
Sell Stop: 1.0860. Stop-Loss: 1.0925. Targets: 1.0825, 1.0710 and 1.0600.
Buy Stop: 1.0925. Stop-Loss: 1.0880. Targets: 1.0990, 1.1030, 1.1050 and 1.1135.
In the downward channel